Chapter Four: Further Devolution and the Constitutional
Consequences of Brexit

172. In this chapter we demonstrate that a consequence of the
EU referendum is the need
for a fundamental review of the
UK's constitutional
arrangements and the powers of the Scottish Parliament to avoid
excessive concentration of power at Westminster. As part of this,
further devolution will be necessary to ensure that Scotland can
meet the requirements of the differentiated position we have set
out. The chapter covers:

a) Matters which are no longer subject to
EU law and that currently
sit within Scottish Parliament competence, for instance
agriculture, fisheries and education. These must remain the
responsibility of the Scottish Parliament.

b) Other areas of
EU competence where
devolution would allow the Scottish Parliament to protect key
rights, for example employment law, and health and safety.

c) The need for devolution, beyond areas of "repatriated"
EU competence, to protect
Scotland's interests, including those necessary to support the
differentiated solutions for Scotland proposed in this paper, for
example through powers over immigration or to conclude
international agreements.

173. Whatever the final terms of the
UK's exit from the
EU, the effect on
Scotland's constitutional position will be profound. The Scottish
Parliament was established in 1999 to enable the government and
laws of Scotland to reflect the values, needs and priorities of the
people of Scotland in a context underpinned by
EU law. As a result of
the
EU referendum the
assumptions underlying devolution no longer hold
[61]. The economic, social and democratic benefits that Scotland
enjoys as a result of its place in the
EU are all now at risk. A
fundamental reconsideration of the
UK's constitutional
arrangements is therefore required
[62]. As part of this, the powers of the Scottish Parliament need
to be increased not just to give effect to the new relationship
with Europe set out earlier in this paper, but also to enable it to
protect Scotland's interests in a context where the protection
provided by
EU law has been
removed.

174. The Scottish Government continues to believe that
independence offers the best long-term future for Scotland. If we
were an independent country we would not be facing the prospect of
being taken out of the
EU against our will.
However, Scotland will only become independent when a majority of
people in Scotland choose that future in a democratic referendum.
The proposals in this paper reflect the mandate given to the
Scottish Government by the Scottish Parliament in the days
following the
EU referendum to explore
all options for protecting our relationship with the
EU.

175. Our starting point is that it is the sovereign right of the
Scottish people, in the words of the Claim of Right, "
to determine the form of government best suited to their
needs"
[63] and that it should be for the Scottish Parliament to
represent their views. While we believe that many of the
considerations set out below will have resonance in other parts of
the
UK, the governance and
constitutional arrangements of England, Wales and Northern Ireland
are matters for the people of those countries.

176. If Scotland is to remain part of the
UK, we need to look at
three broad categories of powers:

a)
"Repatriated" competences in devolved areas. Matters no longer subject to
EU law are the
responsibility of the Scottish Parliament where they concern
devolved areas such as agriculture, fisheries, education, health,
justice and environmental protection. In these areas decisions on
the replacement of the rights and protections provided by
EU law to Scottish
citizens will be for the Scottish Parliament. There must be no
attempt to reserve these matters, which would in any case require
the consent of the Scottish Parliament. Exit from the
EU must not result in
centralisation of control at Westminster. Any provisions in the
UK Government's so-called
"Great Repeal Bill" about matters within devolved competence, or
altering the competence of the Scottish Parliament or Government,
will also require the consent of the Scottish Parliament.

b)
"Repatriated" competences in reserved area. Matters no longer subject to
EU law which are not
within current devolved competence should be devolved to enable the
Scottish Parliament to protect citizens' rights. These should
include areas such as employment law and health and safety
legislation.

c)
Additional powers to protect Scotland's interests. Beyond repatriated powers, the current division of
responsibilities between the Scottish Parliament and Westminster
must be reconsidered to reflect the change that will be effected to
the
UK's constitutional
settlement by leaving the
EU. New powers to secure
any differentiated relationship with Europe should be part of this,
but additional devolution is necessary in any case to ensure that
the Parliament is able to protect Scotland's interests in this new
context.

177. The rest of this chapter considers these issues in more
detail. As a number of commentators have observed
[64], they point to the need for a fundamental reconsideration of
the nature of the
UK state, with different
relationships between its constituent parts as well as changes to
the detail of their powers.

Devolved powers and the replacement of
EU law

178. EU law affects devolved areas through the rights, freedoms
and duties that flow from the
EU treaties and through
EU legislation
(directives and regulations). Under the Scotland Act 1998, the
Scottish Parliament and Government are responsible for implementing
EU law where it applies
within devolved competence, for example by designing and passing
the Scottish laws to put
EU legislation into
effect.

179. If Scotland remains in a
UK outside the
EU, it will be for the
Scottish Parliament and Government to put in place the laws and
administrative systems to replace
EU law in devolved areas.
Any proposal to take back powers from Scotland to the
UK Parliament and
Government on leaving the
EU would require the
consent of the Scottish Parliament under the Sewel Convention
[65] and the Scottish Government would not recommend consent
[66]. Where there may be a need to devise a cross-border
framework within the
UK to replace that
provided by
EU law, for example in
relation to animal health, that should be a matter for negotiation
and agreement between the governments concerned, not for imposition
from Westminster.

180. Some of the major devolved areas that will be affected
include:

a)
Agriculture, food and drink, in areas covered by the
EU Common Agricultural
Policy and
EU law on food and drink,
animal health and welfare, plant health, seeds, potatoes,
pesticides and genetically modified organisms.

b)
Fisheries, aquaculture and the marine environment, which are subject to the
EU Common Fisheries
Policy and marine environment and planning laws.

c)
Environmental protection, including laws on pollution, waste and recycling.

d)
Civil law, in areas such as family law where the institutional and
administrative arrangements which currently shape Scottish and
European co-operation risk being undermined by the
UK leaving the
EU.

e)
Criminal law and law enforcement, particularly in relation to information sharing and
co-operation, the European Arrest Warrant, prisoner-transfer
agreements and counter-terrorism measures.

f)
Health, where for example protections afforded under the
European Health Insurance Card scheme are at risk.

g)
Higher education and research, where Scotland has benefited from
EU mechanisms for
collaboration and funding.

181. Across the
UK, dealing with the
legal and policy consequences of leaving the
EU will be a major
undertaking. The
UK Government has
announced a "Great Repeal Bill" intended to address these issues,
at least initially. The Scottish Government will discuss the plans
with the
UK Government as they
develop, in line with well-established practice for Westminster
legislation
[67]. If, in the light of that and our discussions on the
proposals in this paper, the Scottish Government agrees that the
Bill should include areas within devolved competence or changes to
the powers of the Scottish Parliament or Scottish Minsters, the
legislative consent of the Parliament will need to be sought in the
normal way. The alternative would be to legislate for these matters
in the Scottish Parliament.

Devolution to protect key rights

182. The implications of "repatriation" of
EU competences also need
to be considered for matters not currently devolved to the Scottish
Parliament. In these areas, as in those already mentioned, key
rights and protections under
EU law will be removed.
Devolution of additional responsibilities to the Scottish
Parliament would enable it to reflect Scottish priorities in
safeguarding and enhancing the rights of people in Scotland. Key
areas where additional devolution should be considered in this
context include:

a)
employment law, including that on trade union rights

b)
equalities

c)
health and safety at work

d)
consumer protection.

183. In these areas, too, the
UK Government and the
Devolved Administrations would need to work together to consider
proposals for
UK-wide frameworks,
whether the matters to be covered are formally reserved in a
country's devolution settlement or not, to ensure they meet each
country's priorities and needs, or to allow administrations to make
other national arrangements where appropriate.

Additional powers to protect Scotland's
interests

184. The need for further devolution and a reshaping of the
UK constitution goes
beyond repatriated powers. The
UK's current
constitutional arrangements are rooted in membership of the
EU. The
EU is a source of laws,
policy and funding based on decisions agreed between 28 countries.
Leaving the
EU requires a rethinking
of the nature of the
UK as a state to ensure
an appropriate balance of balance of powers and responsibilities to
replace that previously shaped with reference to
EU law and institutions,
and to avoid a further concentration of power at Westminster. This
needs to cover both the devolution of powers, and the arrangements
for devolved institutions to have a say in decisions on reserved
matters affecting the countries concerned
[68].

185. Our proposals for a differentiated relationship for
Scotland with the
EU would require the
Scottish Parliament to have a range of new powers, but additional
devolution is needed in any case to enable the Parliament to
protect Scotland's key interests in relation to the economy,
democracy, social protection, solidarity and influence that we set
out in this paper. For example, powers over immigration are
increasingly vital for the protection of Scotland's interests.
Indeed, there is a growing view in different parts of the
UK, for example London,
that a one-size-fits-all approach to immigration is no longer
appropriate.

186. Key areas to be considered for further devolution should
include:

Freedom of movement of people, goods, services and
capital. There will need to be arrangements to enable Scottish
law and regulatory regimes to be consistent with the requirements
of the European Single Market, and to protect Scotland's economic,
social protection and solidarity interests. The main areas in which
there will need to be additional devolution, or arrangements to
secure flexibility in reserved policies, include:

a) import and export control

b) immigration

c) competition, product standards and intellectual property

d) company law and insolvency

e) social security, including to enable reciprocal arrangements
with other states

f) professional regulation (for example to enable recognition of
professional qualifications)

187.
International engagement. The Scottish Government will need to take part in trade
negotiations that impact on devolved competences. It will also need
the ability to speak in international forums and to secure
agreements with other countries. This could be achieved either
through an arrangement with
UK Government or by
virtue of an independent international legal personality. To a
significant extent the co‑operation that Scotland will need
to develop with other countries will be concerned with existing
devolved areas, such as such as research, education and training
and environmental policy. However, it will also need to encompass
currently reserved matters listed above.

188. The exact approach to ensuring that the Scottish Parliament
and Government have the necessary powers will need detailed
consideration and a constructive approach from both the
UK and Scottish
Governments.

Conclusion

189. Consideration of the constitutional implications of the
UK leaving the
EU must take place as
part of the overall process now under way. The Scottish Government
will pursue these proposals in its current discussions with the
other Devolved Administrations and other interested bodies, such at
the London Assembly, and in negotiations with the
UK Government.